What was the primary driver of ExxonMobil's reduced earnings in 2016 compared to previous years?

The primary driver for the significant reduction in earnings in 2016 was the substantial decrease in commodity prices for crude oil and natural gas. This directly impacted the Upstream segment's profitability and led to a $2 billion impairment charge on certain U.S. natural gas assets.

How did the decline in commodity prices affect ExxonMobil's proved reserves?

The lower commodity prices in 2016 caused a portion of previously booked proved reserves to no longer qualify under SEC definitions. Specifically, the company reported that 3.5 billion barrels of bitumen at its Kearl operation and 0.8 billion barrels of oil equivalent elsewhere in North America no longer met the economic criteria for proved reserves.

What is ExxonMobil's outlook for energy demand and its strategy to meet it?

ExxonMobil projects a continued rise in global energy demand, driven by population and economic growth, particularly in developing countries. The company anticipates that oil will remain the largest energy source, with natural gas growing fastest. Its strategy involves disciplined investments in attractive, long-term projects, leveraging its integrated business model, technological capabilities, and operational efficiency to meet this demand.

How did ExxonMobil manage its capital expenditures in 2016?

Capital and exploration expenditures were reduced to $19.3 billion in 2016 from $31.1 billion in 2015. This reduction reflects a more disciplined approach to capital allocation, with key project start-ups and a focus on capital efficiencies. The company plans to increase investment to $22 billion in 2017, supporting strategic growth initiatives.

XOM 10-K FY2016 Annual Report — Revenue, Net Income, EPS

Summary

ExxonMobil Corporation's 2016 Form 10-K highlights a challenging year marked by lower commodity prices, which impacted the Upstream segment significantly. Despite a substantial impairment charge related to U.S. natural gas assets, the company maintained a strong financial position, supported by disciplined capital allocation and its integrated business model. The Downstream and Chemical segments provided resilient performance, partially offsetting the Upstream's decline. The company continued strategic investments in growth projects, particularly in areas like the Permian Basin and global LNG infrastructure, anticipating long-term energy demand growth. ExxonMobil's focus remains on operational efficiency, cost management, and technological advancement to navigate the evolving energy landscape.

Financial Highlights

46 data points

Beta

Revenue

$200.63B

Net Income

$7.84B

0.0% Net Margin

EPS (Diluted)

$1.88

Total Assets

$330.31B

Cash & Equivalents

$3.66B

Free Cash Flow

$5.92B

Financial Statements

Beta

Revenue	$200.63B
R&D Expenses	$1.06B
SG&A Expenses	$10.44B
Operating Expenses	$200.15B
Interest Expense	$453.00M
Net Income	$7.84B
EPS (Basic)	$1.88
EPS (Diluted)	$1.88
Shares Outstanding (Basic)	4.18B

Key Highlights

1Significant decline in Upstream earnings due to lower commodity prices, compounded by a $2 billion impairment charge on U.S. natural gas assets.
2Downstream and Chemical segments demonstrated resilience, with Downstream earnings of $4.2 billion and Chemical earnings of $4.6 billion, though margins softened.
3Capital and exploration expenditures decreased to $19.3 billion in 2016, down from $31.1 billion in 2015, reflecting a more selective investment approach.
4Proved oil and natural gas reserves were impacted by low 2016 prices, with 3.5 billion barrels of bitumen at Kearl and 0.8 billion barrels of oil equivalent in North America no longer qualifying as proved reserves under SEC definitions.
5The company continued to manage its operations effectively, with a focus on cost control and operational efficiencies across all segments.
6Long-term strategic investments continued in key growth areas, including the Permian Basin and global LNG projects, underscoring confidence in future energy demand.
7ExxonMobil maintained a strong financial position and liquidity, with unused committed lines of credit totaling $5.8 billion at year-end 2016.

EXXON MOBIL CORP Annual Report, Year Ended Dec 31, 2016

Summary

Financial Highlights

Key Highlights

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